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Last Week in the City

Last Week in the City: Tech jitters emerge after bull run

Garry White, Chief Investment Commentator, provides a round-up of the market movements and the global investing outlook this week ending 4 September.

Garry White, Chief Investment Commentator, provides a round-up of the market movements and the global investing outlook this week ending 4 September.
Garry white employee

Garry White

in Last Week in the City


AstraZeneca is about to put its potential Covid-19 vaccine through final-stage trials as hopes of a vaccine breakthrough continue to provide support to markets. However, a spokesperson for the World Health Organization did not expect widespread vaccinations against Covid-19 until the middle of next year.

There was a sell-off in technology shares at the end of the week. This is significant as it is the technology sector that has been leading US markets to new record highs. Apple alone has $150bn wiped off its market value on Thursday, the day that Nasdaq fell 5%. However, the technology-heavy index is still up almost 70% from lows seen in March this year.

The FTSE 100 fell 3.2% over the course of the week by mid-session on Friday, with the FTSE 250 down 1.7% over the same period.

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Sharing for the greater good: Tessa Clarke is a social entrepreneur attempting to solve an enormous problem – food waste, in her article this week she explains the value of sustainability. 

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The World Health Organization (WHO) does not expect widespread vaccinations against Covid-19 until the middle of next year. None of the candidate vaccines in advanced clinical trials so far has demonstrated a "clear signal" of efficacy at the level of at least 50% sought by the WHO, spokeswoman Margaret Harris said.

Meanwhile, WHO chief Tedros Adhanom Ghebreyesus said he hoped the coronavirus pandemic will be shorter than the 1918 Spanish flu and last less than two years. This will involve the world uniting and succeeding in finding a vaccine, he added.

AstraZeneca has begun the final stage of trials in the US of a potential Covid-19 vaccine developed by University of Oxford researchers. The UK-listed drug behemoth has begun recruiting up to 30,000 people to take part in the Phase III trials, with volunteers in Peru and Chile also participating. The company also expanded an agreement to mass-produce the vaccine candidate as it seeks to scale-up supply ahead of possible fast-tracked approval in the US. AstraZeneca will pay cell therapy firm Oxford Biomedica £15m upfront to reserve capacity in its plant, which will manufacture millions of doses of the vaccine. The deal, worth £50m in total, will see the Oxford company produce “multiple large-scale batches” of the vaccine over the next 18 months and could be extended until the end of 2023.

This week the English, Welsh and Scottish quarantine policies for travellers and holidaymakers split. British Transport Secretary Grant Shapps accepted this was “confusing but he defended the UK Government’s decision to maintain England's travel corridors with Portugal and Greece, despite Scotland and Wales reintroducing travel restrictions. Scotland and Wales then imposed a quarantine on mainland Portugal, shortly after Grant Shapps announced Portugal would keep its travel corridor with England.

Restaurants claimed more than 100 million meals under Chancellor, Rishi Sunak’s ‘eat-out-to-help-out’ scheme, Treasury figures showed. Diners got a state-backed 50% discount on meals and soft drinks up to £10 each on Mondays, Tuesdays and Wednesdays during August. The Treasury said restaurants have so far made 130,000 claims worth £522m, figures are likely to rise as outlets have until the end of September to claim. Mr Sunak said: "From the get-go our mission has been to protect jobs, and to do this we needed to be creative, brave and try things that no government has ever done before.”

Positive US manufacturing data was well received. Activity in US factories accelerated to an almost two-year high in August amid a surge in new orders. However, employment continued to lag, supporting views that the labor market recovery was losing momentum.

The ISM’s forward-looking new orders sub-index increased to a reading of 67.6 in August, the strongest since December 2017, from 61.5 in July. The survey’s measure of order backlogs at factories accelerated as did orders for exports.

As consumer spending recovers and people drift back to work in factories and offices, we need to remember that some sectors remain badly damaged. We look at the industries that are suffering, and the depth of the damage that has been unleashed in this week's article How deep are the scars of Covid-19? 

There is a growing gap between economic reality and the performance of equity markets, with numerous global indices hitting new all-time highs. This cannot continue. We argue that the Federal Reserve needs to signal more of its intentions to the market in this week's article Mind the gap between markets and reality.


The US and China eased their rhetoric over the trade deal signed in January. Garry White argues that the recent thaw in relations between Beijing and Washington over trade is likely to be only temporary in this week's article The US and China ease trade rhetoric.


China is planning a set of new government policies to develop its domestic semiconductor industry and counter restrictions imposed by the Trump administration, Bloomberg reported. The Chinese government is preparing broad support for so-called third-generation semiconductors in its next five-year plan. This is an attempt to be a leader in an essential component of 5G infrastructure after the US administration move to cut off the supply of chips from Huawei using sanctions. Garry White looks at the issue in his article US moves against Huawei could be a tech nightmare.

Shares in America's biggest technology companies – which have been responsible for driving US markets to record highs – tumbled at the end of the week. Apple, Amazon, Alphabet, Microsoft and Facebook – all fell between 4% and 8% on Thursday. There was no single identifiable cause of the change in sentiment, but analysts said fears about the economic shock of coronavirus and a possible second wave prompted the sell-off.

Shares in videoconferencing service Zoom surged after its profits more than doubled in the second quarter. Management raised its annual revenue guidance by as much as 30%.


Brent crude futures fell 2.9% over the week by mid-session on Friday to trade at about $44.40 a barrel. The fall was caused by concerns over demand. A US government report showed that domestic gasoline demand fell in the latest week. Oil product inventories at Asia's oil hub Singapore have soared also above a nine-year high.

Mining and commodities

The gold price edged higher at the end of the week as the dollar's rally stalled. However, the price of bullion was still down for the week, with these earlier moves driven by gains in the dollar at the start of the week coupled with some upbeat economic data.


Switzerland's financial regulator has extended the scope of its probe into Credit Suisse over a shocking spying scandal that led to the exit of its former boss Tidjane Thiam and shocked the conservative world of the Gnomes of Zurich.

The Swiss Financial Market Supervisory Authority (Finma) has begun enforcement proceedings against the bank after opening an investigation last year following a spying case that gripped the Swiss banking world. In September last year it emerged that Credit Suisse's former wealth management boss, Iqbal Khan, had been chased through the streets of Zurich by detectives hired to track him after he quit to work for arch-rival UBS. It appears the scandal is now widening.


City centre shops remain deserted as workers stay away from their offices and the British Retail Consortium has urged the government to do more to help struggling stores and other businesses. The latest figures for footfall in August showed high streets are bearing the brunt of consumers' nervousness to return to shops, with 41.7% fewer visitors than the same month last year.

Fears had been growing that Debenhams was about to fall into administration, but its chairman said the plug isn't about to be pulled at the end of this month. Mark Gifford says the department store group has been doing far better than expected and isn't facing a cliff edge, either. "We are sitting with over £95m in the bank, more than £50m higher than we expected to have when we went into administration, Mr Gifford said. “That's really changed the whole complexion and prospects.”


Four of the UK's largest housebuilders are being investigated after "troubling evidence" was uncovered in an investigation into the way leaseholds were sold. Barratt Developments, Countryside Properties, Persimmon Homes and Taylor Wimpey face action from the Competition and Markets Authority (CMA). Buyers argued that they are caught in a leasehold trap, with rising ground rents and unfair fees. The CMA has demanded information from the developers and could go to court.

UK house prices hit a new record high, with homeworkers demanding more space, a release of pent-up demand following lockdowns and a stamp duty cut all playing a role in the rise. Nationwide building society said August brought the highest monthly price rise for 16 years. The average price of a property rose 2% from the previous month to £224,123. The lender said that “behavioural shifts” was a possible factor driving gains, as prospective buyers reassessed their housing wants and needs due to remote working.


Airlines have called on the US and UK governments to launch a passenger testing trial for flights between New York and London. Executives of Airlines For America, Airlines UK, Heathrow Airport, and Virgin Atlantic said "passenger testing solutions in air travel" between New York and London should be in place by the end of the month to "gather real world evidence and data". Sharon Pinkerton, senior vice president at Airlines for America, which represents American Airlines, Delta Air Lines, United Airlines and others, said: "One of the key steps to recovery is setting up an international pilot programme between the US and either Europe, Canada, somewhere in the Pacific." Such a programme could help eliminate some of the international quarantines currently in place, she said.

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